In 2013 Daniel Handel, an economist with USAID—the U.S. government’s main agency for foreign assistance—had just moved to Rwanda when he heard about a charity that was testing a bold idea:
Instead of giving people in poor countries, say, livestock or job training to help improve their standard of living, why not just give them cash and let them decide how best to spend it?
Handel had been mulling this exact question. Aid programs were spending enormous sums per person to boost poor people’s income less than the cost of the program. At this rate, Handel thought, why not just hand over the money to people directly? This program called GiveDirectly was doing just that.
So Handel went to his bosses at USAID’s Rwanda office and proposed an experiment:
Take one of USAID’s typical programs and test it against cash aid. His initiative has since grown to encompass six experiments in four countries. He is currently overseeing these tests from a new position, senior adviser on aid effectiveness at a USAID research unit in Washington, D.C.
A pool of families from nearly 250 villages was selected based on typical criteria and randomly assigned to one of four groups.
- Those in the first were the “control” and received no help.
- Those in the second group were visited by the teams from the nutrition and hygiene program.
- Families in the third group were given small cash grants by GiveDirectly equivalent to the per-person cost of the nutrition and hygiene program, which ultimately averaged out at $114.
- In the final group, families got a much larger cash grant of around $500 – a figure chosen because this was the amount that GiveDirectly estimated was more likely to make an impact.
On Thursday, the government released the results of the first study in the series: An evaluation of a program to improve child and maternal health in Rwanda by teaching families about nutrition and hygiene.
The experiment found that the program met none of its main objectives. Teaching Rwandans about nutrition did not improve their nutrition or health. Neither did giving Rwandans the cash equivalent of the cost of the education program — about $114.
“Our hearts sank.”
The program’s focus on trying to change behaviors is one of the world’s major strategies for ending malnutrition. And, at least in this example, it had failed to achieve any of its primary goals.
A year on, the children who had been targeted by the nutrition and hygiene program were no more likely to eat a better or more diverse diet, and no less likely to be malnourished or anemic than children who had gotten no help at all. But providing a much larger cash grant of about $500 did make some difference.
Supporters of such “cash-benchmarking” exercises are heralding this particular one as a milestone. For years, anti-poverty advocates and researchers have complained that the U.S. government doesn’t do enough to make sure its aid programs actually work. “But when you talk about giving money to people straight up, with no conditions, people at USAID look at you kind of like you’re a crazy person. There’s ‘an inherent sense’ that they can’t be trusted to spend it wisely.” said Daniel Handel’s associate James Carbonell.
In this case, people who were given the cost-equivalent grants used much of the money to pay down their debts.
It remains unclear what, if any, material changes USAID is planning to its nutrition efforts based on the study’s findings.
- Did the authors of the study Fail?
- Would proving that cash-equivalent grants were as beneficial as the education program have qualified as Success?
- Or did the authors succeed by proving that simply handing recipients money without any stipulation was the wrong way to achieve a particular goal?
- Could the authors conclude that poor people really DON’T know “what to do with the money”?
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Heavily edited from an original story by NPR.
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Link to the original:
Which foreign aid programs work? The U.S. runs a test — but won’t talk about it
Just giving people money wouldn’t be the smartest idea because it wouldn’t be teaching them how to be useful in the long run, but it will definitely test the hypothesis. Even though the test seemed like it failed because it met none of its main objectives, it truly did not fail because it reached end results and proved that the hypothesis did not work. This way, the creators of the hypothesis know whether to stop trying to prove their point or not. Proving anything qualifies as a success.
Testing the hypothesis was a success even though it failed, the expriement showed how the program funding did not work but the problem then becomes now the agency will spend less and less until they find a program that works- which could hurt the Rwandan people even more
I think that this hypothesis was very intriguing but at the same time the USAID should’ve known that giving these people money who have lived a certain way their whole life wouldn’t use it in the right way. It may have no failed completely because there was a lot of research found but in a way it did fail because your goals for these people ultimately failed in the end.
I do think that the US was trying to help, and although that is nice, if the family wanted to help their children in the first place they would. Instead of paying off their debt they should have first helped their suffering children.The US shouldn’t be criticized on how much we are giving because anything we give can help.
The authors did not fail they simply found the amount of aid being issued was not an amount that would make a substantial change. Proving the superiority of cash-equivalent grants would certainly be beneficial, but knowing what does not work prevents money wastage. The experiment isn’t about whether poor people spend their money wisely, rather measuring the effectiveness of of a program relative to the absolute cost.
I don’t think that the author’s trial failed. I think that they got valuable information on what works and what doesn’t when it comes to funding the lower class. Giving people money isn’t the solution as shown by the information. It may look like this hypothesis failed it just showed that governments can use this method in the future.
I think it was interesting to look at an experiment as a success even if their first try didn’t go as planned. Rather than just giving up on the experiment, they decided to try other options. I believe that having just programs isn’t enough because if you’re only teaching people how to have good hygiene, that doesn’t automatically mean that they’re going to continue the good hygiene once they get home. I also believe having more money would be able to help provide food because people look to pay off debts while the have the money at the moment because they know they might not be able to get that much money ever again.
The US wanted to be helpful but it was the families priority to help there kids over paying back there debt
This test on giving the poor the money was not a fail, but rather it was a win in the fact that they know giving out free money to the families in need would not be an effective way to boost health and nutrition. They reached a point to where now they can determine if giving more money is really the solution or not and whether or not they should continue. There is such thing as a fail to the tests the do, but never a fail to the hypothesis as it proves to them whether or not one thing will work or not. Proving something wrong is worth the same as proving something right since it helps researchers get the info they want.
I believe that the authors study was not a fail and that the authors succeeded by proving the recipients money without any stipulation was the wrong way to receive the final goal. They found out that the people who received the $500 grant were better off than the people who got the cash equal grants. The USAID looked at them like they were crazy for wanting to just give people $500 who didn’t know what to do with it, but that was the most effective option out of the 4. Therefore they did not fail, they found success but couldn’t follow through with it again with out the USAID funds that were necessary for making more change in Rwanda and other poor villages in need of the money.
It is good that multiple ideas were tested with the amount of money given otherwise the results would have shown that the people did not know what to do with the money they were given. In reality, they just needed the right amount of money to get them in a better place financially. I did also agree with trying to educate the people on nutrition so that they could make better choices with the money, but the test seemed to show that this wasn’t too helpful. The results of showing that people benefited from the $500 was a positive result.
1. I do not think the authors of the study failed. They were able to learn from their study, and they analyzed the benefits of giving directly to the people. The idea behind a hypothesis is to conduct an experiment, not to prove something, so they conducted their experiment. In doing so, they discovered that their original ideas were not great, so they adapted and came to a more suitable conclusion.
2. Proving that cash-equivalent grants were as beneficial as the education program would have qualified as a success because they discovered a better way to improve the lives of people in Rwanda. However, it could also be considered a failure because their goal is to prevent malnutrition, but if people are not educated on how to be more nutritious, it does not help their cause.
3. They definitely proved that handing money directly to people, without educating them on how to effectively spend it, for the reasons stated above. Yes, the economy would improve, but general healthy would likely not change much, and malnutrition would still be an issue.
4. By conducting the study, the authors could conclude that the poor people do not know how to use money because after giving them money, nothing improved for the Rwandans in any of the 3 groups.
I don’t think the authors of the studies failed. It certainly wasn’t a successful test and there was a loss in money. However, one could see this as an option that we now know for sure is not the way to go. I think there is a certain aspect that can be seen as failure. However, I do like the idea of the “give directly” hypothesis. There would be no waste in spending on programs when we can give them as much money as possible for them to benefit their lives. Yet there could be a lot of negative outcomes.
The authors failed their goal. The tests had a goal and the desired goal was a successful aid program. The aid program didn’t do anything, so the goal was not met, being a failure. The author’s succeeded in finding an answer to THEIR problem, however. The program did not meet expectations and the tests showed results of not being helpful. The tests were a success since they gave results.
Proving cash-equivalence is equal to aid programs as true is a success. The same can be said for proving it not equal. Separating the hypothesis and test results from the actual outcome and goal is key.
Poor people are all different. Giving money to someone who ran their business into the ground is not a good idea. Giving money to someone who was screwed over by some recession or decline in whatever it is they are involved in might be a good thing to do. The people of Rwanda needing money might not be given enough money to solve their problems or meet the same criteria I stated above, all being different. Some of the people receiving aid from the programs might pull a Steve Miller Band and leave with the money. Some might use it to give their kids a better life or improve their lives to start again.
i thought that interesting that he was trying to change even though his study failed but also interesting about some of the children’s behavior actually did change when they started to choose better and healthy foods.
The authors of the study did not fail. An experiment could never be a failure unless perhaps it was done incorrectly; but the only thing that happened was the unexpected. When you learn despite not getting the results you expect, it should still be considered a success. If they had proved that both approaches to tackling poverty were equally as effective, they have succeeded because they learned something new and important. It’s only a small experiment that hasn’t been replicated, but for supporters of “just giving money” to the poor, this could be considered a huge success, given that the results of the experiment proved the hypothesis they were going for. Now, if simply giving money had little to no effect, one could consider the possibility of the participants spending the money improperly. But for any conclusions to be clear and reasonable, the experiment should be replicated.
Not all problems disappear just by giving people in need money, especially people that have never really had money before. No one taught the Rwandans how to properly use or save the money so I can see why there was little to no progress. The USAID was definitely trying to help but I just don’t think they did enough. The hypothesis failed and that is information that can be taken away from this.
– The authors of the study did fail, we as human beings must test our hypothesis in order to advance further in our research. If we gave up at every failure, we would never advance as a society. Even though they failed they still made at least some progress.
– In the eyes of the researchers, it may have. It may have not proven exactly what their first hypothesis claimed, but it may prove something that they didn’t quite expect before doing the experiment.
– The results that did come to handing recipients money with no stipulation may have not proven the idea they wanted to prove, but there was some progress made in their research.
– There is no right way to spending your money. Different people may value things over other things in life and therefore choose to spend their money on what they deem more important. What we, as Americans might consider being smart spending could be completely irrational in the eyes of someone else.